MARKETS CHEERFUL AS NIFTY TOUCHES 8650; BULLS MAY TAKE REST BEFORE BUDGET on FEBRUARY 1
NIFTY: With four days of stunning market gains, it may be possible that the markets have discounted most of the good news that may come in the budget. Our view on the coming Union Budget: Stock markets always believe that the world exists for them. Maintain capital gains exemption, reduce STT, give tax breaks to FII’s, reduce corporate taxes, increase income tax slabs, allow provident funds to invest in equity, give tax free status to different infra, realty and other funds. Give, give and give more. Fortunately, Finance ministers usually understand these demands are made almost entirely for the benefit of the big players in the market. It is quite possible that the budget may give less or nothing to the stock markets, but may give a lot to the people of India. In the long run, this will be very bullish for the markets. After all, the markets prosper only when the country prospers. But, most market participants will be annoyed at not getting their ice‐creams and sweets. How to approach the Budget Day This one is easy. We never trade or keep positions in big news events. Step aside during the budget. Do not keep any positions
BANK NIFTY: Bank Nifty opens at 19588 with a gap up of almost 128 points. The index made is intraday near its open at 19534 and started moving upside. This upside momentum continues with some minor intraday dips. The index closes above just 19700 with a gain of almost 242 points.The index has witnessed a rally of more than 1000 points in last four trading days. As the Union Budget is schedule on February 1, we may see this rally as a post budget rally. We may see some choppy and narrow price action in near future. We are long in the index from 19170. With today’s closing at 19 we are now in a profit of almost 532 points. On Wednesday we had suggested a tight stop at first 15 min low. That low placed at 19114.15 and prices never cross below this low. So our long position is intact so far. Now we are advising our readers to take profit on Monday Morning from this long trade. Exit from this position at open. Traders should trade very light till the budget.
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